Lawmakers talk oil taxes, budget issues at forum

Sen. Cathy Giessel, R-Anchorage, talks to a group during a combined Soldotna and Kenai Chambers of Commerce Luncheon and legislative wrap-up Wednesday May 1, 2013 at the Soldotna Sports Center in Soldotna, Alaska.

Sen. Peter Micciche, R-Soldotna, smiles at one of his daughters during a legislative wrap up for a combined Soldotna and Kenai Chambers of Commerce Luncheon Wednesday May 1, 2013 at the Soldotna Sports Center in Soldotna, Alaska.

Rep. Paul Seaton, R-Homer, greets Mary Jo Joiner, director of the Kenai Community Library, after a legislative wrap-up during a combined Kenai and Soldotna Chamber Luncheon at the Soldotna Sports Center in Soldotna, Alaska.

House Speaker Mike Chenault said he could justify Senate Bill 21 — a North Slope oil tax overhaul recently approved by state lawmakers — by referencing just one slide he saw while working in Juneau this legislative session.

That slide showed that Alaska was the only oil-producing state during the last few years that had declining levels of oil production.

“That should tell Alaskans something when we took on the task of modifying the ACES program is that Alaska was the only state in the union that saw a decline in production and you can relate that right back to investment,” the Nikiski Republican said. “If that investment is not happening in this state, we’ll continue to see that decline.”

Oil taxes were the main topic of conversation at a Wednesday gathering of lawmakers from around the Kenai Peninsula hosted at the Soldotna Sports Center. In attendance at the joint Kenai and Soldotna Chambers of Commerce luncheon were Chenault, Rep. Paul Seaton, R-Homer, Sen. Peter Micciche, R-Soldotna and Sen. Cathy Giessel, R-Anchorage.

The four legislators talked about the legislation they had sent to Gov. Sean Parnell for a decision and touched briefly on a smattering of subjects like derelict vessels, education funding, health, mining, corporate income taxes and the operating budget.

Micciche said the keystone piece of legislation that passed this session was SB21, which he said will move the state forward.

“I think you should be comforted in knowing that it is not the slash we talked about in the past,” he said. “It is sort of a gentler reduction that we evaluated carefully and brought us to a point where we believe that we are competitive with other producing areas.”

Giessel echoed that sentiment — Alaska can’t stop declining production of oil without a more competitive oil tax structure. She said lawmakers were able to pass SB21 based on the difference made by one election, a fact she said she marveled at this year.

“Those two years, 2010 and 2011, were the years of ‘no,’” she said. “Everything — no, no, no. This year was the year of yes. It’s time to do it. In fact this Senate majority had a slogan: time to act.”

She said ballot referendum efforts in the works to let voters decide whether or not to overturn SB21 were a “big hairy deal.”

“It’s a group of people pushing back and saying, no, again, just when the legislature finally moved Alaska forward,” she said. “So here’s the question — do we want a strong economic future for us and for our children or grandchildren? Or do we want to continue as the Speaker (Chenault) said, to ride the decline down?”

Seaton, who didn’t speak to the subject during the luncheon but commented by phone later Wednesday, said he initially voted against SB21, but then voted in favor of it on reconsideration.

He said he offered a number of amendments to the bill, which asked for performance requirements, that eventually failed. He said he wished such requirements made the final version of SB21 considering the degree of difficulty and amount of time it takes to change oil taxes in the state if they aren’t working.

“If students in schools have performance standards and teachers have standards and state agencies have performance standards, why can’t we have performance standards for the biggest multinational corporations as well?” he said. “That was the biggest thing I had problems with the bill about.”

Lawmakers also talked about the state’s operating budget, which Giessel said is “spiraling upward” and that it would be a “big job” to rein in that spending.

She said the legislature started that process this year, but cautioned that it would be a slow process.

“You run a home budget, you know how it is when you are starting to run over what you should be spending,” she said. “It takes a while to adjust back, but we have started to do that. Yes, we got some great funding for the Peninsula, but we focused on certain key things — infrastructure, health and safety, police, fire.”

Chenault agreed and said the operating budget is the “elephant in the room.”

He said the recently-passed House Bill 30 will bring auditors in to each state department over several years to “dig all the way to the bottom” and come up with recommendations on how legislators can get control of the state’s cost of operations.

“We have programs in some of these state departments that might be five years, 10 years, they might be 30 years old, but we don’t know how effective they are,” he said. “And we as legislators ... have 90 days to go through a $12 billion budget — (that) is pretty tough.”

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"That slide showed that Alaska was the only oil-producing state during the last few years that had declining levels of oil production."
The statement that would be more accurate if stated Alaska had the steapest rate of decline of the five major oil producing states (three in fact increased production). California has also seen a decline in production, but also has a higher rate of corporate tax and the least investment incentives.http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm
I am in favor of an incentivised tax law. However, I would like to see the performance requirement Senator Seaton mentioned in place, not necessarily to guarantee an increase in production, but to show investment with the objective of increased production. If the producers can show investment in existing fields to extract more oil and/or investment in new opportunities on the slope, I feel the tax bill would be more readily accepted by the Alaska constituency.

Fact: We will now be gifting at least a billion dollars a year to the oil companies without any guarantee of "filling up the pipeline". This is an incentive without a performance guarantee, sometimes referred to as "a wing and a prayer". Wally Hickel and Jay Hammond are rolling in their graves.

Fact: Alaska budgets in the future will be driven by unnecessary austerity. Roads, education, and other infrastructure will suffer because of this unnecessary gift to some of the wealthiest corporations in America.

Fact: Employment and exploration have been on the increase in Alaska without the billion dollar a year giveaway.

Prediction: Supporters of SB21 will attribute every announcement of industry investment to the new tax structure, even though the decisions for the investments were made in a board room years before the new giveaway plan was passed.

" bankrupt the Permanent Fund." The government created the permanent fund.I do agree if big oil could've kept all that money and more there would be a lot less people like crazy 88's living here.What have they taken from you of personally 88's

Theres a guy in front of the sport rec and trade show at the sports center this weekend with a petition to sign for the repeal of the HB 21 giveaway. Please sign it and vote for Bill Walker for Governor. Thank you.

1) The repeal would be for SB 21 not HB 21. HB 21 would allow a pilot program for one rural school district to implement a 4 day school week and I don't believe there is a petition circulating to put that on the August 2014 ballot.

2) As of yet, there is nothing to repeal as the bill has not been signed into law.

3) A referendum to to put the tax bill (which would have to be signed into law first) to a vote of the public must meet the following criteria:
a) It must have 31,000 qualifying signatures, or 10 percent of the electorate (registered voters).
b) At least 7 percent of voters who voted in the most recent General Election in 30 of the state’s 40 house districts must sign the petition. So, if someone stands in front of a busy shopping mall or venue to collect signatures, all of those signatures would not necessarily qualify to validate the petition. Ironically, this amendment was voted on by the people of Alaska in 2004 (Alaska Distribution Requirement for Initiatives, Measure 1).
c) The petition must be filed and verified within 90 days of the final day of the legislative session which is why the petition is circulating now.

4) If the governor does not sign the bill (my guess is he will) this petition will be for nothing.

Do I think this is achievable? Yes I do! Do I think it is the wisest choice? No, I don't! Why not? Because most voters don't know and will not bother to find out the specifics of the bill (law) good or bad. Some haven't researched enough to know if it is a House Bill or a Senate Bill, but they will still consider themselves informed because one candidate or media outlet said it was a good or a bad bill. I'm sorry to say, but simply because you read a newspaper, listen to the radio or watch TV doesn't make you "informed." Those are the facts as those particular media outlets would like you to hear or see them. To find the "real" facts one must do his or her own research.

We voted in legislators to do our bidding with the help of a well trained staff. If we cannot inform ourselves enough to elect representation to do the work of a republic (we are not a democracy, but a democratic republic) what leads us to believe we can actually, without emotion and only with reason and logic, make an informed vote on legislation of such importance?

All said above may be true, but it would be a large outpouring of public opinion on what we think of lowering taxes on big oil,an outpouring of public sentiment if you will.It would be the wishes of the people .
I like the way you keep using the word informed,the labor unions use the word educated when they lobby people.
"I'm sorry to say, but simply because you read a newspaper, listen to the radio or watch TV doesn't make you "informed."
I'm sorry to say legislators are informed/educated by lobbyists or people that lobbyists hire to testify. News papers may have or may not have an agenda but lobbyists definitely do.We all get our information from some one else, be it open forum , back room or internet.
As far as electing lawmakers goes, they tell us what they want us to hear and then go and do what they want , or rather what their party wants and if they don't.....well just ask Tom Wagner. Money wins elections not facts.
I am tire of big oil peeing on my leg and telling me that it's raining. People may not be as stupid as you think they are.
New leases should have a limit of 10 (pick a number)years on them from beginning of the lease till a certain amount of development has been done,kind of like the homesteaders were required to do on their homesteads,or they go back to the state. Lastly,there is still a lot oil and a lot of infrastructure,(TAPS etc.) that will have to be sold and/or removed ,do you really think they're going let that happen?Sorry you probably can't answer without some speculation.

If you were to go to a thesaurus and type in the word "educate" you would find one of the alternative words is "inform"

I am not "lobbying" anyone. I am simply having a discussion in which all views can be shared in a respected, civil and yes, informed or educated manner.

Yes, legislators are informed (educated) by lobbyists who bring in specialists or experts. This is done in much the same way a court of law is conducted. Each opposing view (prosecution and defense) brings in their specialist with their specific facts to a hearing (court) and those facts are sifted through. However, both sides often cherry pick those facts and don't always bring the entire truth. It is up to the legislators and their staff, to the best of their ability, find and piece together the entire truth. Unfortunately, you are correct when you state that the legislators more often than not, do the bidding of the party and not the people. George Washington warned of party politics in his farewell address and his prophecy has come true.

"Newspapers may or may not have an agenda???" Please do tell of the "fair and balanced" news media. I know of none!!! Of course they have an agenda! That is to sell advertising to perspective customers and those customers are looking for a specific target group that is going to view or listen to that media. Media reporting doesn't always dictate public opinion. Sometimes, public opinion dictates what and how media reports.

Electing officials: "...they tell us what they want us to hear and then go and do what they want ..." So how many times do they do this and we still continue to elect them? Do we check their voting records? Attendence? Legislation that they introduced, sponsored or co-sponsored? If it's a new candidate, do we investigate, through research, their background? Their civic involvement? Their credentials that would be applicable to the office they are seeking? I think that is rare! More often than not, we trust the media and don't do our own research.Most of us trust what is told us by the media or worse yet, political advertising. The electorate is just smart enough to continually repeat our mistakes (see Washington D.C).

On to the infrastructure and the subject of remediation.: Again, you are correct! One can only speculate on remediation of the field since those requirements are at best, vague. As quoted from the GOA report:
"The state of Alaska’s dismantlement, removal, and restoration requirements, which apply to most current oil industry activities on the North Slope, stipulate that oil companies return the land to a condition that is satisfactory to the state. Because this requirement has not been further defined, there is no specific guidance on what infrastructure needs to be removed and to what condition the land must
be restored. The state may also waive requirements altogether if it decides that it wants the development to remain in place." In other words, if the oil companies walk away and cease production, we could have our dream come true and develop and deliver our own resource! (sarcasm) Realistically, the removal or abandonment of the North Slope facilities and infrastructure will happen. Just as many of the platforms in the inlet are no longer producing, eventually that will happen on the slope. The Colliers and Conoco LNG plants are evidence of that. All things eventually come to an end. http://www.gao.gov/assets/160/157249.html

To more firmly grasp the base of the tax conversation, one should know the history. If you look at ELF, ELF II, PPT and ACES, you can see there is a great deparity in how and how much severence was paid to the state through these tax laws. We have gone from one extreme to the other and there should be a middle ground somewhere in between.http://lba.legis.state.ak.us/pubs/history_of_alaskas_oil_gas_production_...

"Electing officials: "...they tell us what they want us to hear and then go and do what they want ..." So how many times do they do this and we still continue to elect them? Do we check their voting records? Attendance? Legislation that they introduced, sponsored or co-sponsored?" 2 words.........Don Young.As I've said before money wins elections ,not facts. If you have one eye and a bellybutton you know these things about him,yet (and I've NEVER voted for him) he can't be blasted out of office with a truckload of dynamite.Mark Begich is the first person to be federally elected to his first term in decades Stevens was appointed,Young was appointed Lisa was appointed by her father.
I agree with you on a lot of what you say but I don't understand how a lobbyist's biased facts are any more valid than a news paper's biased facts. Personally I read the Wall St. Journal and the New York Times,listen to Fox news and CNBC and of course the internet. If the Journal and the Times happen to say the same thing on something,well it might actually be the truth.Same with Fox and CNBC. The internet, you can "prove" any point you want to make someplace on the internet.
As I say I agree with you on a lot of the things you say except Micciche's agenda. Trust but verify , we aren't the CIA how do we verify agreements made over dinner and drinks?
"George Washington warned of party politics in his farewell address and his prophecy has come true." People say the founding fathers said this or the founding fathers said that.The truth is the founding fathers did not speak in unison they disagreed on a lot of things but there was almost total agreement about the danger of political parties.President Washington was the ONLY president elected without the involvement of political parties. Political parties and lobbyists are the most dangerous things there are to this country and they will be the death of our republic. Speculation or prophecy ?Take your pick.
Sorry I got totally off point here but once I started I couldn't stop.

From George Wasington's Farewell Address:
"However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion"
The rest of this passage is here:http://www.democraticunderground.com/discuss/duboard.php?az=view_all&add...

As for checking facts presented by media, a good outlet will often list their sources. Most do not.
For fact checking on major news stories, I would suggest factcheck.org (they do list sources in nearly all instances).

A good read for how to verify facts is:
"Un-Spun: Finding Facts in a World of Dis-information."
by: Brooks Jackson and Kathleen Hall Jamieson

"As I've said before money wins elections ,not facts." I agree with you on this to a very large degree. Money wins elections only because the politician is able to flood the media with his/her name and a truck load of misleading facts that we, the ill informed and ignorant voter, buys. Money can't buy an election persay, but it can buy some very shrewd and cunning advertisement.
It takes informed, well thought debate and discussions (like these) to unspin the "facts."
An uninformed citizenry incapable of critical thinking is the dream of a tyranical government. Or as Jefferson more elequently stated:
"1786 August 13. (to George Wythe) "I think by far the most important bill in our whole code is that for the diffusion of knowledge among the people. No other sure foundation can be devised, for the preservation of freedom and happiness...Preach, my dear Sir, a crusade against ignorance; establish & improve the law for educating the common people. Let our countrymen know that the people alone can protect us against these evils [tyranny, oppression, etc.] and that the tax which will be paid for this purpose is not more than the thousandth part of what will be paid to kings, priests and nobles who will rise up among us if we leave the people in ignorance."

Money can buy advertising, but it can't buy the critical thinker! Those who chooses to vote blindly, without care of the facts or accurate information, gets the government they deserve.

"As I've said before money wins elections ,not facts." I agree with you on this to a very large degree. Money wins elections only because the politician is able to flood the media with his/her name and a truck load of misleading facts that we, the ill informed and ignorant voter, buys. Money can't buy an election persay, but it can buy some very shrewd and cunning advertisement.
It takes informed, well thought debate and discussions (like these) to unspin the "facts."
An uninformed citizenry incapable of critical thinking is the dream of a tyranical government. Or as Jefferson more elequently stated:
"1786 August 13. (to George Wythe) "I think by far the most important bill in our whole code is that for the diffusion of knowledge among the people. No other sure foundation can be devised, for the preservation of freedom and happiness...Preach, my dear Sir, a crusade against ignorance; establish & improve the law for educating the common people. Let our countrymen know that the people alone can protect us against these evils [tyranny, oppression, etc.] and that the tax which will be paid for this purpose is not more than the thousandth part of what will be paid to kings, priests and nobles who will rise up among us if we leave the people in ignorance."

Money can buy advertising, but it can't buy the critical thinker! Those who choose to vote blindly, without care of the facts or accurate information, get the government they deserve... One equally as uncaring and thoughtless toward its citizenry as the citizenry was toward their election.